Contingent Workforce as the New Normal
The 21st century brought a dramatic shift to the notion of the “traditional workforce.” In 1999, about 5.6 million workers held contingent jobs (short-term or temporary) which represented a mere 4.3% of the total workforce.
Fast forward two decades and the picture is very different. At the current growth rate, it’s estimated that 67.6 million Americans, or 42% of the American workforce, will become contingent workers by the end of 2021. By 2027, freelancers are expected to make up 50.9% of the working population, which represents most of the workforce in the US!
Clearly, this growth is driven by the generations born between 1980 and 2000: 53% of working Gen Zers are currently freelancing, which is more than any other generation. A staggering 47% of millennials are freelancers and more are expected to join the freelancer economy by the end of the year.
Whether we refer to them as contingent workers, freelancers, giggers, or digital nomads, ultimately, we are talking about a growing portion of a new category of workers who have consciously rejected the traditional 9-to-5 work scenario in favor of flexibility, choice, and a different life-work balance dynamic. They have eschewed the notion of company loyalty and longevity in favor of having a diversified portfolio of income working remotely or short-term for multiple clients.
The Pros and Cons of the Gig Economy
Given that by 2025 millennials will make up 75% of the global workforce, companies need to adapt quickly and creatively to the advent of the gig economy. As traditional employment practices become replaced by a sizable, semi-permanent workforce as the norm, it is expected that organizations of all sizes substantially increase their use of a contingent workforce.
The main reasons for opting for contingent workers are flexibility, cost savings, project-specific skills, and more agility. At the same time, today’s business reality presents additional challenges that companies need to address to meet their strategic business objectives, such as the impact of COVID-19, skyrocketing costs of recruiting and retaining talent, talent shortage, and employee turnover.
According to Gallup’s job change statistics, millennial turnover costs the US economy $30.5 billion annually. Dubbed the “job-hopping generation”, only during the past year 21% of millennials have changed jobs. This high turnover rate places a huge burden on the American economy when we consider that the national average cost-per-hire in the US in 2021 is in the range of $4,000-$4,500, based on research by the Society for Human Resource Management and Bersin by Deloitte.
The problem is compounded by the fact that companies are also having trouble filling positions for skilled professionals. A survey conducted by Manpower Group that included 42,000 employers from 43 countries reported that global talent shortages have reached a 15-year-high.
Sourcing Contingent Labor the Right Way
In this volatile situation sourcing and managing contingent labor itself presents a serious conundrum for many organizations. Traditional hiring and onboarding approaches are often cumbersome and inadequate. This is especially evident in the IT sector where most initiatives are project-based and require speed.
One way companies can reduce the cost and complexity of managing contingent workers is by engaging with a staffing partner that provides the talent they need on-demand and is responsible for all the recruiting costs.
According to Doug Fink, who leads the Tech Talent unit at iShift, organizations of all sizes and industries embrace this model with great enthusiasm. “The reason our clients choose us is because we bring acceleration, precision, and breadth to the hiring process. We have a robust ecosystem of certified, versatile, and highly skilled IT contract professionals who can join their team at a day’s notice. There is no HR overhead for our clients because these candidates remain iShift employees throughout the engagement. Furthermore, once we engage with a client for talent, they come to us when they need to find the right people for other projects. It just works!”
If finding the right IT talent is preventing you from starting your next endeavor, iShift can help. Whether you are looking for short-term or long-term Architects, Engineers, Developers, or Consultants, the iShift team has the knowledge, experience, and expertise to make your enterprise-class project a complete success.
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About iShift
iShift is a multi-cloud technology solutions company that provides cloud engineering, cloud migration, cloud management and specialized IT staffing services. Our mission is to help businesses to simplify and accelerate growth while enabling digital transformation and IT modernization. No matter where organizations are in their cloud journey, iShift can design, build, optimize and manage a future-ready multi-cloud environment, resulting in significant cost savings, increased workforce productivity, operational resilience, continuity of services, and business agility. For more information on how our offerings empower businesses through their adoption of cloud and modern technology, visit www.ishift.net.